BILL ANALYSIS                                                                                                                                                                                                    Ó




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          |SENATE RULES COMMITTEE            |                        SB 122|
          |Office of Senate Floor Analyses   |                              |
          |(916) 651-1520    Fax: (916)      |                              |
          |327-4478                          |                              |
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                                   THIRD READING 


          Bill No:  SB 122
          Author:   Jackson (D) and Hill (D), et al.
          AmendedAmended:6/1/15  
          Vote:     21  

           SENATE ENVIRONMENTAL QUALITY COMMITTEE:  5-1, 4/15/15
              AYES:  Wieckowski, Hill, Jackson, Leno, Pavley
              NOES:  Gaines
              NO VOTE RECORDED:  Bates

          SENATE APPROPRIATIONS COMMITTEE:  5-2, 5/28/15
             AYES:   Lara, Beall, Hill, Leyva, Mendoza
             NOES:  Bates, Nielsen

           SUBJECT:   California Environmental Quality Act: record of  
                     proceedings


          SOURCE:    Author


          DIGEST:  This bill authorizes concurrent preparation of the  
          record of proceedings while a lead agency is conducting an  
          environmental review on a project subject to the California  
          Environmental Quality Act (CEQA) and expands the Office of  
          Planning and Research's (OPR's) central database of CEQA  
          documents.


          ANALYSIS:   


          Existing law, under CEQA:

          1) Requires lead agencies with the principal responsibility for  








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             carrying out or approving a proposed discretionary project to  
             prepare a negative declaration, mitigated negative  
             declaration, or environmental impact report (EIR) for this  
             action, unless the project is exempt from CEQA (CEQA includes  
             various statutory exemptions, as well as categorical  
             exemptions in the CEQA guidelines). (Public Resources Code  
             (PRC) §21000 et seq.).  

          2) Establishes a procedure for preparing and certifying the  
             record of proceedings for an action against a public agency  
             on the grounds of noncompliance with CEQA.  (PRC §21167).

          3)Requires the lead agency to submit to the State Clearinghouse  
             a sufficient number of copies of specified environmental  
             review documents and a copy in an electronic form under  
             specified circumstances.  (PRC §21082.1).

          4) Requires OPR to establish and maintain a database to assist  
             in the preparation of environmental documents.  (PRC  
             §21159.9(b)).

          5) Requires OPR to establish and maintain a central repository  
             for the collection, storage, retrieval, and dissemination of  
             specified notices and make those notices available through  
             the Internet.  (PRC §21159.9(c)).

          This bill:  

          Concurrent preparation of the record of proceeding

          1)Requires the lead agency, upon written request by a project  
            applicant and with consent of the lead agency, to concurrently  
            prepare the record of proceedings with the administrative  
            process.

          2)Requires all documents and other materials placed in the  
            record of proceedings to be posted on a Web site maintained by  
            the lead agency.

          3)Requires the lead agency to make publicly available, in  
            electronic format, the draft environmental document, and  
            associated documents, for the project.








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          4)Requires the lead agency to make any comment publicly  
            available electronically within five days of its receipt.

          5)Requires the lead agency to certify the record of proceedings  
            within 30 days after filing notice of determination or  
            approval.

          6)Requires certain environmental review documents to include a  
            notice, as specified, stating that the document is subject to  
            this section.

          7)Requires the applicant to pay for the lead agency's cost of  
            concurrently preparing and certifying the record of  
            proceedings.

          State Clearinghouse database system for CEQA documents

          8)Requires OPR to establish and maintain a database for the  
            collection, storage, retrieval, and dissemination of  
            environmental documents and notices prepared pursuant to CEQA  
            and to make the database available online to the public.

          9)Requires OPR to submit a report describing the implementation  
            of the database to the Legislature by July 1, 2016, and a  
            status report by July 1, 2018.

          Background
           
          1)CEQA:  The environmental review process.  A CEQA environmental  
            review document is a public document.  It provides for  
            transparency as well as an opportunity for citizens to comment  
            on the document and participate in the environmental review  
            process.  

          CEQA provides a process for evaluating the environmental effects  
            of a project, and includes statutory exemptions as well as  
            categorical exemptions in the CEQA guidelines.  If a project  
            is not exempt from CEQA, an initial study is prepared to  
            determine whether a project may have a significant effect on  
            the environment.  If the initial study shows that there would  
            not be a significant effect on the environment, the lead  








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            agency must prepare a negative declaration.  If the initial  
            study shows that the project may have a significant effect on  
            the environment, then the lead agency must prepare an EIR.

          Generally, an EIR must accurately describe the proposed project,  
            identify and analyze each significant environmental impact  
            expected to result from the proposed project, identify  
            mitigation measures to reduce those impacts to the extent  
            feasible, and evaluate a range of reasonable alternatives to  
            the proposed project.  Prior to approving any project that has  
            received an environmental review, an agency must make certain  
            findings.  If mitigation measures are required or incorporated  
            into a project, the agency must adopt a reporting or  
            monitoring program to ensure compliance with those measures.

          If a mitigation measure would cause one or more significant  
            effects in addition to those that would be caused by the  
            proposed project, the effects of the mitigation measure must  
            be discussed but in less detail than the significant effects  
            of the proposed project.

          2)What is analyzed in an environmental review?  Pursuant to  
            CEQA, an environmental review analyzing the significant direct  
            and indirect environmental impacts of a proposed project, may  
            include water quality, surface and subsurface hydrology, land  
            use and agricultural resources, transportation and  
            circulation, air quality and greenhouse gas emissions,  
            terrestrial and aquatic biological resources, aesthetics,  
            geology and soils, recreation, public services and utilities  
            such as water supply and wastewater disposal, cultural  
            resources such as historical and archaeological resources, and  
            tribal cultural resources.  

          The analysis must also evaluate the cumulative impacts of any  
            past, present, and reasonably foreseeable projects/activities  
            within study areas that are applicable to the resources being  
            evaluated. A study area for a proposed project must not be  
            limited to the footprint of the project because many  
            environmental impacts of a development extend beyond the  
            identified project boundary. Also, CEQA stipulates that the  
            environmental impacts must be measured against existing  
            physical conditions within the project area, not future,  








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            allowable conditions.

          Comments

          1)Purpose of bill.  According to the authors:

            [CEQA] ensures that state and local agencies make informed  
            decisions when undertaking projects that may impact the  
            environment.  Stakeholders have voiced concern that the  
            current CEQA process can be cumbersome and inefficient.  In  
            May 2014, the Senate Judiciary and Environmental Quality  
            Committees sent a joint letter to a broad range of CEQA  
            stakeholders - developers, business, environmental, and labor  
            groups, planners, local governments, and academics - asking  
            for community input on how to improve the process without  
            undercutting the statute's goal of fostering informed  
            environmental decisionmaking.  Drawing upon stakeholder  
            responses to that letter, this bill will enact [two]  
            substantive changes to CEQA that will help expedite the  
            process while protecting the integrity of the act.

            First, it will authorize lead agencies to concurrently prepare  
            their administrative records while going through the CEQA  
            process, rather than after the process has concluded.  Second,  
            it will improve the accessibility of CEQA related documents by  
            expanding the use of California's online CEQA State  
            Clearinghouse.  

             During the Senate Judiciary Committee hearing last year on SB  
             1451 (Hill and Roth) regarding CEQA "document dumping,"  
             Senator Jackson and Senator Hill agreed to explore ways to  
             improve the CEQA process in conjunction with the broader CEQA  
             community.  As part of that effort, they sent a joint letter  
             to CEQA stakeholders asking for community input on how to  
             improve the process without undercutting the statute's goal  
             of fostering informed environmental decisionmaking.  The  
             Senate Environmental Quality and Judiciary Committees  
             received 13 responses from stakeholders who collectively  
             represent a cross-section of the CEQA community.  Two broad  
             consensus recommendations emerged from these 13 responses,  
             and many community members indicated that these two  
             recommended changes would greatly improve the CEQA process:   








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             concurrent preparation of the record of proceedings and a  
             centralized database for CEQA documents.

          2) Concurrent preparation of the record of proceedings.  

             a)   Potential time-saver for post-decision CEQA challenge.   
               SB 122 provides the option of preparing the record of  
               proceedings during the CEQA environmental review process in  
               order to save time and effort in the event of a  
               post-decision CEQA challenge.  Depending on factors such as  
               the complexity and length of the environmental review,  
               preparation can take multiple months.  However, in  
               situations where an agency believes a project is likely to  
               be challenged, it is probably more efficient and  
               expeditious if the record is prepared concurrently with the  
               preparation of other project-specific environmental  
               documents.  Additionally, concurrently prepared records may  
               be more defensible in court, given that they are not  
               post-hoc recreations assembled some time (potentially  
               several months) after the relevant CEQA decision is made.

             Concurrent preparation is not specifically prohibited under  
               existing law, but it has only been expressly authorized for  
               certain projects (e.g. AB 900 (Buchanan and Gordon, Chapter  
               354, Statutes of 2011), environmental leadership  
               development projects (ELDPs)).  Providing public agencies a  
               general authorization to engage in concurrent preparation  
               may take away any uncertainty on the matter and make a  
               public agency more likely to adopt the practice for  
               appropriate projects.

             b)    Time is money.  In general, preparation of the record  
                of proceedings begins after a lawsuit is filed and the  
                petitioner pays.  This can result in a substantial amount  
                of time to go by before there is any resolution.  

             One issue that some CEQA stakeholders contend is that CEQA  
                litigation delays projects.  As noted above, the  
                concurrent preparation of the record of proceedings can  
                save the project applicant several months of delay.  It  
                seems logical and reasonable that the beneficiary of an  
                action should pay for that action to occur.  








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             If a project applicant believes that litigation is  
                inevitable, it may behoove that entity to ask the lead  
                agency to prepare the administrative record in conjunction  
                with the environmental review process - the efficiency of  
                simultaneous preparation can possibly save months of time  
                preparing for litigation, such as tracking down and  
                collecting documents to add to the administrative record.

             For example, under AB 900, five project applicants have/are  
                utilizing concurrent preparation process as an ELDP.   
                Those projects had to meet stringent standards in order to  
                be an ELDP and benefit from AB 900's provisions, including  
                concurrent preparation of the administrative record for  
                which the project applicant pays.  

             SB 122's concurrent preparation provision is discretionary  
                and not mandatory.  If an applicant has no reason to  
                believe that its project will be subject to litigation,  
                then the applicant may choose not to utilize this option.   


          3) Increase use of Internet resources - The State Clearinghouse.  
              The authors state, "[OPR] operates a limited online CEQA  
             repository (called "CEQAnet") as part of the State  
             Clearinghouse used for state-level review of environmental  
             documents.  This second component of this bill will direct  
             OPR to expand its online CEQA repository to include copies of  
             all CEQA documents in a single repository, forming a true  
             statewide CEQA clearinghouse."

          Many CEQA stakeholders have noted that the CEQA process makes  
             poor use of internet resources for distributing information,  
             providing notice to affected parties, and facilitating the  
             submission of comments.  The current CEQA process is still  
             largely paper-based, and information that is posted online is  
             often buried deep within agency or project proponent Web  
             sites.  Currently, OPR has operates a limited online CEQA  
             repository as part of the State Clearinghouse used for  
             state-level review of environmental documents.  This bill  
             proposes to expand OPR's clearinghouse to include copies of  
             all CEQA documents in a single, electronic database system,  








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             which would be available via the Internet and to the public.   
             Stakeholders believe such a resource would greatly expedite  
             the CEQA process by eliminating transmission times for  
             relevant documents.  In addition, universal accessibility of  
             such a resource would make it much harder to justify last  
             minute "document dumps."

             A fully functioning clearinghouse would provide California  
             residents with an easy to use, universal point of entry into  
             the CEQA process, furthering the policy of transparency and  
             public participation in the environmental review process.  

          4) Proposed central database:  potential cost savings. Expanding  
             OPR's CEQA database would require a financial commitment by  
             the state, but it is likely that any new costs could be  
             offset by reductions in agency staff time and resources used  
             to distribute paper-based materials.  Last year, the  
             California Research Bureau (CRB) researched CEQA-related  
             document handling costs for selected state agencies and  
             looked into issues such as clerical document management and  
             preparation and delivery costs.  According to CRB:

               We estimate that the cumulative annual cost to State  
               entities in staff time commitments for clerical processing  
               and handling of CEQA-related documents exceeds $250,000 and  
               may easily be in excess of $500,000, with additional  
               expenditures for materials, supplies, and delivery  
               services.  Not all of these staff expenditures are truly  
               avoidable costs, as few State entities delegate any  
               clerical staff full-time to CEQA-related document handling  
               functions.  But it appears plausible that an effective,  
               electronic document management system and web-based  
               application for CEQA-related document submission and  
               retrieval by Lead Agencies and Reviewing Agencies could  
               generate cost savings across the state.

             Under CEQA, the Legislature declares the policy of the state  
             shall be that "All persons and public agencies involved in  
             the environmental review process be responsible for carrying  
             out the process in the most efficient, expeditious manner in  
             order to conserve the available financial, governmental,  
             physical, and social resources with the objective that those  








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             resources may be better applied toward the mitigation of  
             actual significant effects on the environment." (PRC  
             §21003(f)).  SB 122 proposes to help move CEQA forward by  
             utilizing technology that was not present when CEQA was  
             originally established.

          Related/Prior Legislation
          
          SB 1451 (Hill and Roth, 2014) would have expanded CEQA's  
          exhaustion requirements by precluding an individual from  
          challenging a public agency's compliance with the Act if the  
          alleged grounds of noncompliance were known or could have been  
          known with the exercise of reasonable diligence during the  
          public comment period, but the alleged grounds of noncompliance  
          were presented to the public agency at a time other than during  
          the public comment period.  The bill also would have expanded  
          CEQA's exhaustion requirements by precluding a person from  
          challenging a public agency's compliance if the person objected  
          to the approval of the project at a time other than during the  
          public comment period when a public comment period was provided.  
           SB 1451 died in Senate Judiciary Committee.

          SB 731 (Steinberg and Hill, 2013) would have enacted the "CEQA  
          Modernization Act of 2013," making various clarifications and  
          revisions to CEQA, including requiring the lead agency, at the  
          request of a project applicant, to prepare and certify the  
          record of proceedings concurrent with the administrative process  
          for certain environmental documents under certain conditions.   
          SB 731 died in Assembly Local Government Committee.

          AB 37 (Perea, 2013) would have required the lead agency, upon  
          request of a project applicant, to prepare and certify the  
          record of proceedings concurrently with the administrative  
          process for projects subject to CEQA review.  AB 37 was  
          subsequently amended to address integrated regional water  
          management plans and was eventually placed on the Senate  
          Inactive file.

          SB 984 (Simitian, 2012) would have required a lead agency to  
          prepare and certify the record of proceedings concurrent with  
          the administrative process for certain environmental documents  
          under certain conditions, and would have sunsetted January 1,  








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          2016 (contingent enactment with AB 1570 (Perea)).  SB 984 died  
          on the Senate Floor.

          AB 1570 (Perea, 2012) contained provisions relating to  
          certification of the record of proceedings concurrent with the  
          administrative process for certain environmental documents under  
          certain conditions, and would have sunsetted on January 1, 2016  
          (contingent enactment with SB 984 (Simitian)).  AB 1570 died in  
          Senate Rules Committee.

          AB 900 (Buchanan and Gordon, Chapter 354, Statutes of 2011)  
          established CEQA administrative and judicial review procedures  
          for an environmental leadership development project, including a  
          requirement for concurrent preparation of the administrative  
          record.

          FISCAL EFFECT:   Appropriation:    No          Fiscal  
          Com.:YesLocal:   No

          According to the Senate Appropriations Committee:

           One-time costs of $200,000 from the General Fund to establish  
            the database at the Office of Technology, including necessary  
            training.


           Ongoing costs of $45,000 from the General Fund to the Office  
            of Technology to host and update the database.  These costs  
            may be offset by savings to various special funds and the  
            General Fund for reduced administrative costs to state lead  
            agencies.


           One-time costs of $20,000 from the General Fund to OPR to  
            provide training for lead agencies on the new database.


           Unknown costs to state agencies, to the extent they are the  
            lead agency under CEQA, to concurrently prepare the record of  
            proceeding (various special funds and General Fund).  These  
            costs should be fully reimbursed by project applicants who  
            request the record of proceedings to be prepared concurrently  








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            with the administrative process.


          SUPPORT:   (Verified5/28/15)


          Association of Environmental Professionals
          Brandt-Hawley Law Group
          California Labor Federation
          California League of Conservation Voters
          Center for Biological Diversity
          Chatten-Brown & Carstens
          Natural Resources Defense Council
          Shute, Mihaly & Weinberger LLP
          State Building and Construction Trades Council  


           OPPOSITION:   (Verified5/28/15)


          Associated General Contractors of California
          Association of California Cities, Orange County
          Association of California Water Agencies 
          Bay Area Council
          Bay Planning Coalition
          California Business Properties Association
          California Business Roundtable
          California Construction and Industrial Materials Association
          California Retailers Association
          Central City Association of Los Angeles
          Engineering Contractors' Association
          Harbor Association of Industry & Commerce
          Humboldt Association of REALTORS
          Los Angeles Area Chamber of Commerce
          Los Angeles County Economic Development Corporation
          National Federation of Independent Business
          Orange County Business Council
          Pleasanton Chamber of Commerce
          San Diego Regional Chamber of Commerce
          San Francisco Chamber of Commerce
          San Gabriel Valley Economic Partnership
          San Mateo County Association of REALTORS
                                                                     







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          Santa Clara Chamber of Commerce
          Santa Clarita Valley Economic Development Corporation
          Sonoma County Alliance
          Southern California Water Committee
          Southwest California Legislative Council
          UnitedAg
          Valley Industry & Commerce Association 
          West Coast Lumber and Building Materials Association

          ARGUMENTS IN SUPPORT:  A coalition of support states, "One  
          concern raised with respect to CEQA is the delay associated with  
          litigation.  In our experience preparation of the administrative  
          record is usually the most time consuming part of CEQA  
          litigation in the trial court.  Section 1 of the bill would  
          allow project applicants to request preparation of the record  
          concurrent with the administrative review process.  Because most  
          environmental documents are already available in an electronic  
          format, this option could be easily implemented and would reduce  
          the time needed to prepare the record if litigation is filed.   
          Although we support the concept of concurrent preparation,  
          because this is an option available at the project applicant's  
          discretion, the bill should ensure that the cost of such  
          preparation is borne by the project applicant?Section 2 would  
          require electronic posting of notices and environmental  
          documents.  This amendment is a critical reform that will  
          modernize CEQA and make the environmental review process more  
          transparent." 


          ARGUMENTS IN OPPOSITION:     A coalition of opposition states,  
          "SB 122's concurrent preparation of the administrative record  
          process will rarely-if ever-be utilized because it would impose  
          new, unrecoverable costs on the project applicant and expose  
          applicants to new delays and litigation.  Under existing law, it  
          is well-settled that the petitioner must pay the costs of  
          preparing the administrative record during CEQA litigation or  
          claims.  SB 122 allows project applicants to request concurrent  
          preparation of the record, but if such request is made, the cost  
          of preparing the administrative record - which could range in  
          the hundreds of thousands - would shift entirely to project  
          applicants as unrecoverable costs.  Equally concerning is the  
          provision that would require real-time electronic posting of the  








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          contents of the administrative record as they are compiled.  The  
          administrative record contains incomplete documents that  
          inevitably morph into much improved final documents as a result  
          of the iterative process that CEQA requires.  This provision  
          would hinder forward progress of the administrative process by  
          allowing the public to submit premature and unnecessary comments  
          and objections to draft documents that have not yet even been  
          corrected, improved, and finalized through the lead agency's  
          internal review process."


          Prepared by:Joanne Roy / E.Q. / (916) 651-4108
          6/1/15 18:50:14


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